After six years of hard work, the bipartisan Medicare Prescription Drug,
Improvement, and Modernization Act of 2003 was passed by both the House and
Senate in late November and was signed into law by the President on December 8,
2003. This historic legislation helps about 490,000 Iowa seniors and individuals
with disabilities by adding a voluntary prescription drug benefit to Medicare.
This new law also makes important reforms to strengthen and improve the program
for generations to come.

This legislation provides several provisions to ensure that Medicare
beneficiaries are provided with choice and easy accessibility to local
pharmacies, and to provide proper oversight of pharmacy benefit managers. The
new law provides choice to beneficiaries by containing an any willing provider
provision. This provision requires prescription drug plans to accept any and all
pharmacies willing to agree to the terms and conditions of the plan. By adding
this provision we have given all pharmacies, big and small, the opportunity to
participate in the modernization of Medicare.

The new law also requires that prescription drug plans and Medicare Advantage
plans provide beneficiaries with convenient access to pharmacies by adopting the
TRICARE access standard for prescription drug plans, which requires access to
pharmacies in rural and urban areas. This is the same pharmacy access standard
used for health care coverage provided through TRICARE, which is the health care
plan for the Department of Defense. In addition, to simplify the administration
of the drug benefit for pharmacists, all Medicare prescription drug plans will
be required to use a standardized benefit card for its enrollees.

The Medicare prescription drug legislation also requires plans to cover
prescriptions filled at community pharmacies rather than solely through
mail-order. In addition, prescription drug plans may not unfairly steer
prescriptions to mail-order as any differential in payment between a retail
pharmacy and mail-order is limited to only that amount that reflect any
difference in costs. By adopting these requirements, pharmacies are protected
against unfair practices by pharmacy benefit managers and beneficiaries are
ensured adequate, convenient access to pharmacies of their choice.

In addition to providing convenient, local access to pharmacies, the Medicare
legislation also provides safeguards to ensure fair drug pricing and protects
pharmacies from have to accept insurance risk. Under the legislation, the
prescription drug plans will be required to disclose all discounts, rebates, and
charge backs given to them by drug manufacturers. In addition, the Medicare
prescription drug plans are prohibiting from requiring pharmacies to accept
insurance risk as a condition of participating in its pharmacy network. These
provisions are designed to protect local pharmacies and provide a fair playing
field for competition.

This new law also establishes a Medication Therapy Management Services
program in the new prescription drug benefit, which recognizes pharmacists as a
health care provider in the Medicare program for the first time since its
inception in 1965. The creation of this program recognizes the role that
pharmacists play in the management of the patients' medication therapy assures
access to pharmacists' services. Medication therapy management programs will be
designed to assure, for beneficiaries at risk for potential medication problems
such as beneficiaries with complex or chronic diseases (such as diabetes,
asthma, hypertension, and congestive heart failure) or multiple prescriptions,
that drugs under the plan are appropriately used to optimize therapeutic
outcomes through improved medication use and to reduce the risk of adverse
events, including adverse drug interactions. The Medication Therapy Management
Program will be developed in cooperation with licensed pharmacists, and
pharmacists are eligible under the legislation to provide these services as part
of the prescription drug benefit. The Pharmacists Provider Coalition called the
Medication Management Program "a big step forward for patient safety."

In addition, this legislation will result in national standards for
electronic prescribing, which will be have a dramatic impact on pharmaceutical
care in this country. The electronic prescribing provisions in the legislation
require the Secretary of Health and Human Services to develop or adopt standards
for electronic prescribing that will ensure that pharmacists and physicians have
access to the patient's complete medication history, information on eligibility
and benefits, formulary requirements. These standards will be designed to
improve patient safety and the quality and efficiency of patient care, and I
believe that electronic prescribing will be particularly beneficial for the
profession of pharmacy and for the advancement of quality pharmacy care in this
country.

Finally, I have heard from a large number of pharmacists who are concerned
about pharmacy benefit managers. Many pharmacists have contacted me with their
concerns that PBMs are treating local pharmacies unfairly and that they
inappropriately steer business to their own mail-order pharmacies. To respond to
this serious concern, this Medicare legislation orders an investigation of PBMs
and their mail-order operations by the Federal Trade Commission (FTC). The
purpose of this investigation is to determine if the use of mail-order
pharmacies owned by PBMs results in lower or higher prescription drug costs. In
particular, the FTC will examine whether PBMs routinely switch patients from
lower priced drugs to higher priced drugs in the absence of a clinical reason
for doing so and whether these mail-order pharmacies dispense fewer generic
drugs. The FTC investigation will include an assessment of the differences in
drug spending for patients who obtain their prescriptions through mail order
pharmacies owned by PBMs compared to those not owned by PBMs, and community
pharmacies. The FTC is required to submit a report to Congress within 18 months
of enactment.

As Chairman of the Senate Finance Committee, and lead architect of the Senate
bill, I believe that the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 has finally delivered on a long-time promise to
strengthen and improve the Medicare program for all beneficiaries. Forty million
seniors and Americans with disabilities shouldn't have to wait any longer for
prescription drug coverage. Medicare is part of our country's social fabric, and
we're not only saving it, but we're also improving it.